ams Osram AG Q1 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Francois Bouvignies - UBS Investment Bank - Analyst : Thank you very much. I have a couple if I may. The first one is on the free cash flow and maybe the exit on the micro-LED. You mentioned about the EUR400 million and that you can reduce the debt, and your negotiation with parties. You also said that you think it's going to take time. Maybe can you help us manage expectations a bit on this timeline? Is it like a 2024 next quarter or two, three quarters, just that would be helpful to them to manage expectations here? And my second question is on the CMOS that you know action as well that you're doing. I was wondering why -- I mean what changed because you did already review six months ago more with this new plans, and now you come up with this new additional one. So why didn't you take that decision already six months ago and now you are acting further? And the final one would be on the H2 recovery. Many of your peers are flagging H2 recovery in the industry. I was wondering if you were seeing the same, because you don't talk about so much about the outlook beyond Q2. And what would be the impact on your gross margin? Your gross margin has been flattish, but what leverage of product mix we should expect that the impact will have on the gross margin means that on half of the year? Thank you.

Question: Francois Bouvignies - UBS Investment Bank - Analyst : Okay. And Reiner, just a follow-up on this. This EUR400 million that you mentioned, do you see given the interest as a floor? Because if you have a lot of interest, I guess you could get a bit more out of it, I would imagine. Do you see upside to this EUR400 million? What is your -- how should we think about that?

Question: Francois Bouvignies - UBS Investment Bank - Analyst : Thank you very much. On the gross margin directory image, you're seeing this level for now --

Question: Francois Bouvignies - UBS Investment Bank - Analyst : Yes, absolutely. I will be back to queue. Thank you.

Question: Janardan Menon - Jefferies - Analyst : Hi, good morning. Thanks for taking the question. Just a clarification -- sorry, can you hear me?

Question: Janardan Menon - Jefferies - Analyst : Yeah. Just a clarification on the second sale and leaseback. I mean, can you just explain to me why you're doing that? I mean, you have a lot of potential interest in the fab. So why a second sale and leaseback versus just a sale itself? I mean, and the second sale and leaseback, you're saying you don't have to make lease payments. So what exactly is the mechanics of that transaction that you're trying to get to? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 26, 2024 / NTS, AMS.S - Q1 2024 ams Osram AG Earnings Call

Question: Janardan Menon - Jefferies - Analyst : Okay. So from our purposes, you shouldn't see the second sale-and-leaseback as pretty much a sale from your point of view?

Question: Janardan Menon - Jefferies - Analyst : Understood. And just add two short follow-ups from me. One, is your exit exit from the EUR300 million, EUR400 million of initially announced businesses, including passive optical components, is that going on schedule, because -- and when can we expect to hear any announcements of actual sale? Is that something that will come through by Q3 or will that be Q4? And can you just give us a number for what could be the savings from the exit of the CMOS image sensor business in consumers? Thanks.

Question: Janardan Menon - Jefferies - Analyst : On the CMOS image, I'm just saying, you've already got EUR75 million of cost reduction. Can we add something on top of that, because of the additional exit from the -- or the 75-plus -- 75 -- EUR150 million. Can you add, can we add something on top of that for the CMOS image sensor?

Question: Janardan Menon - Jefferies - Analyst : Understood. Thank you.

Question: Robert Sanders - Deutsche Bank - Analyst : Thanks for taking my question. I guess just to follow up on the SLB, I guess one option I guess you don't seem to be considering is to break the SLB and then, monetize the asset yourself. Is that because there's just not many cash buyers out there and therefore, or maybe there's a contractual penalty for you to do that approach? I'm just trying to just trying to understand why that doesn't seem to be an option you're considering. Thanks

Question: Robert Sanders - Deutsche Bank - Analyst : Got it. And just for a follow-up, just on the debt maturities, you say, you refund for the maturities up to '26. I just wondered what you were thinking about '27? And what are those refinancing -- what is the refinancing that you have ability to support the maturities in this year, next year and '27?

Question: Robert Sanders - Deutsche Bank - Analyst : Thank you.

Question: Juergen Wagner - Stifel Financial Corp. - Analyst : Good morning. Thank you for letting me on. Our your CSA segment, what margin level would be realistic, let's say, an upturn '26 and post all disposals in '25? And then, you mentioned a second question on newer high pixel LED lighting, you mentioned them in the handout of your design wins. How is adoption progressing in general and how significant can it be for you in, let's say, also '26? Thank you.

Question: Juergen Wagner - Stifel Financial Corp. - Analyst : Okay, thank you.

Question: Didier Scemama - Bank of America Securities - Analyst : Good morning gentlemen. Didier Scemama from Bank of America Securities. Thanks for taking my call and squeezing me in. I just wanted to apologize because I missed the beginning of the call, so you might have addressed that point earlier. On your smartphone design win ramp up in the back half, can you just give us an update where you are on that and whether you have sort of received additional design wins for future generations in compensation for the combination of the liquidity project? Thank you.

Question: Didier Scemama - Bank of America Securities - Analyst : All right. Thank you so much.

Question: Sebastien Sztabowicz - Kepler Cheuvreux - Analyst : Yeah, hello, everyone. Thanks for taking my question. Coming back to the gross margin question, what kind of fab loading do you have today in your front-end fabs? And the what are the underutilization charges that you have booked in Q1, just to have an idea of the drag from acquisition charges? Next one question is linked to and the OpEx. You have a lot of moving parts cost cutting, but also from micro-LED (inaudible) investment. What should we model in terms of OpEx for the full year? Can you help us modeling your OpEx? Thank you.

Question: Sebastien Sztabowicz - Kepler Cheuvreux - Analyst : Okay. And on the subletting today, where are you standing right now? You have any number to share with us?

Question: Sebastien Sztabowicz - Kepler Cheuvreux - Analyst : Okay, thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 26, 2024 / NTS, AMS.S - Q1 2024 ams Osram AG Earnings Call

Question: Sandeep Deshpande - JPMorgan Chase & Co. - Analyst : Yeah, hi. Can you hear me?

Question: Sandeep Deshpande - JPMorgan Chase & Co. - Analyst : Yeah. In terms of on the disposal and the shutdowns or internal businesses that we are going to do over the next year, is the intention to continue to reduce the consumer business of ams-OSRAM to a much smaller amount of consumer business? And so what other consumer businesses that you are going to target going forward? Clearly, you've got a new win in the second half of the year, to understand in the future, what are consumer business and we are going to target? And then I have a quick follow-up on the balance sheet.

Question: Sandeep Deshpande - JPMorgan Chase & Co. - Analyst : And actually, maybe my follow-up, will be on this itself. You talked about spectral sensing et cetera. Do you have new products coming out in this area that have potential future traction? And is that really -- obviously, you are in the ambient light sensor, but some of these other things I sectors have seen, do they have any future significant traction with any customer base? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 26, 2024 / NTS, AMS.S - Q1 2024 ams Osram AG Earnings Call

Question: Sandeep Deshpande - JPMorgan Chase & Co. - Analyst : Thank you.